Tennessee Senate Drops Plans To Intervene In Nashville's Short-Term Rental Debate

May 9, 2017

State senators are dropping plans to get involved in Nashville's debate over short-term rental units owned by investors. The decision comes just one day after their counterparts in the Tennessee House of Representatives voted to put a two-year moratorium on new rules.

A Senate committee voted to delay decision on the so-called "Short-Term Rental Unity Act" until 2018.

Sen. John Stevens, R-Huntingdon, says there are a lot of reasons why his effort to regulate short-term rentals failed for the year. One worry was overreach.

"It's not the same, but it's similar to federal interference in a state issue," Stevens said. "We're very mindful of that in the General Assembly. We don't like the feds telling us what to do, and I know the local governments certainly, as you can tell, don't appreciate us telling them what to do."

But empathy wasn't the only thing working against the proposed freeze. Another was that the moratorium was drafted in such a way that it would only apply to Nashville.

Stevens says there could still be a need for the legislature to step in and draft some statewide rules for Airbnb and other short-term rental companies.

Legislators say a lot will depend on how Nashville resolves its debate over investor-owned rentals. If city officials come down too hard, they face the risk of the General Assembly taking the issue back up in 2018.

Monday night, the Tennessee House of Representatives voted on the bill backed by Airbnb to place a two-year freeze on new regulations.

Rep. Cameron Sexton, R-Crossville, said action was needed to protect the property rights of investors who have bet on Nashville's short-term rental market.

"My intent here is to create a two-year reprieve so that we can take the pressure off and actually have some discussions at the table to continue this endeavor," Sexton said.

Even though the bill passed the House, Republican leaders objected to the idea of singling out Nashville. They included House Speaker Beth Harwell, herself from the Forest Hills area, and Majority Leader Glen Casada of Franklin. GOP opponents to the statewide regulations said lawmakers should wait and see how the debate in Nashville turns out before getting involved.

Action was deferred in the Metro Council last week after a couple of marathon public hearings in which investors argued for continuing to allow offsite owners of short-term rentals. Many neighbors complained, calling the homes "mini hotels" that are changing the character of residential neighborhoods. A second of three votes in the Metro Council is scheduled for Tuesday.